What to Know in Washington: Trump’s Plan to Reopen the Economy

The White House is developing plans to get the U.S. economy back in action that depend on testing far more Americans for the coronavirus than has been possible to date, according to people familiar with the matter.

The effort would likely begin in smaller cities and towns in states that haven’t yet been heavily hit by the virus. Cities such as New York, Detroit, New Orleans and other places the president has described as “hot spots” would remain shuttered.

The planning is in its early stages. But with encouraging signs that the outbreak has plateaued in New York after an aggressive but economically costly social-distancing campaign, President Donald Trump and his top economic advisers are once again boldly talking about returning Americans to work.

“We’re looking at the concept where we open sections of the country and we’re also looking at the concept where you open up everything,” Trump told Sean Hannity of Fox News last night.

Larry Kudlow, the director of the National Economic Council, said earlier yesterday on Fox News that reopening might begin within four to eight weeks.

“We are coming down, I think, the home stretch, that’s what the health experts are telling us,” he said at a White House event. “Once we can reopen this thing, I think it’s going to be very successful.”

Trump has sought a pathway to return Americans to work and schools since early March, even when his top health advisers recommended against it. As the outbreak mushroomed to hundreds of thousands of cases — filling hospitals in New York City and threatening to overwhelm health systems elsewhere — he backed away from a return to normal until at least the end of April.

But he continues to show his frustration with a pandemic that has blunted his best argument for re-election, the strength of the U.S. economy. Read more from Mario Parker.

Recession RIsk at 100%: The novel coronavirus has spurred what will likely be the worst recession in generations as the U.S. economy grinds to a halt and millions lose their jobs. Bloomberg Economics created a model last year to determine America’s recession odds. The chance of a recession now stands at 100%, confirming an end to the nation’s longest-running expansion. While much of the economic data that feed into the model continues to lag, filings for unemployment benefits — which are reported with less than a week’s delay — saw an unprecedented increase at the end of March. About 10 million jobless claims were filed in the last two weeks of the month, underscoring a sharp deterioration in the once-vibrant labor market. Read more from Reade Pickert, Yue Qiu and Alexander McIntyre.

Source: Bloomberg Economics

What to Watch

The White House coronavirus task force will give parallel telephone briefings to House Democrats and Republicans today, according to House aides. Similar briefings are scheduled for senators tomorrow. The briefings are expected to be headed by Vice President Mike Pence and Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases.

Trump will participate in a call at 1:45 p.m. with state, local and tribal leaders on the coronavirus response, according to his daily schedule. The president will then hold a call with faith leaders at 2:30 p.m.

The White House will hold a Coronavirus Task Force press briefing today at 5 p.m.

Economic Actions & Industry Pains

Relief Lands at Some Small Firms: At least some small businesses have begun receiving funds under an ambitious Trump administration effort to blunt the coronavirus pandemic’s economic fallout, though lenders continued to report technical glitches and mom-and-pop firms complained they still couldn’t get loans. The launch of the U.S. Small Business Administration program to distribute $349 billion in aid to small business owners, which enters its sixth day today, has been fraught with a barrage of applications, a lack of clear rules and an overwhelmed system that froze on Monday, meaning that no one could process loans for hours.

The clock is ticking for millions of business people who have been forced to close under shutdown orders and face laying off employees and possibly going under in a matter of weeks or even days. Mark Niquette, Ed Ludlow and Misyrlena Egkolfopoulou have the latest.

• BGOV OnPoint: America’s Small Businesses Get $349 Billion Boost

Trump Praises Banks for Small Firm Aid: Trump yesterday praised some of the country’s largest financial firms for pledging to take new steps to help small businesses disrupted by the coronavirus. Trump heralded their plans as he hosted a video conference with leaders of banks including Goldman Sachs, Bank of America, Citigroup, and JPMorgan Chase. The participants, top executives from the five biggest U.S. banks and two of the largest payment networks, touted their efforts to help affected businesses and consumers — pointing to capital devoted to small business loans, an assortment of waived fees, and loans and grants to community development financial institutions. Still, lenders reported some glitches in connecting to the Small Business Administration to get loans approved for small businesses. Read more from Justin Sink and Mark Niquette.

Banks Blame U.S. Rules for Snarling Loans: U.S. banks, facing criticism for prioritizing existing customers over new ones who are seeking coronavirus rescue loans, put the blame on federal rules meant to catch terrorists and money launderers. The lenders, who have been getting beaten up by small businesses and lawmakers alike, have urged a little-known agency charged with monitoring suspicious financial transactions for relief from the stringent regulations. But their requests have gone unheeded for now. Read more from Robert Schmidt and Jesse Hamilton.

Direct Stimulus Pay to Small Businesses: Senate Finance Committee ranking member Ron Wyden (D-Ore.) said he hopes to provide direct federal government payments to small businesses, similar to those being provided to individuals and families, in a fourth coronavirus relief package. “We’re going to come out and push for direct cash assistance,” Wyden said. “I think they ought to get a check for a modest amount,” in addition to the bridge loan or grant aid already being provided, he said, Colin Wilhelm reports.

K-12 Groups Want $200 Billion: Kindergarten though 12th grade schools need over $200 billion in emergency federal aid to weather the impact of coronavirus, education groups including the two national teachers’ unions told congressional leaders. Lawmakers provided about $13.5 billion for the schools in the stimulus package signed last month, but education groups argue schools need assistance on the same scale as the 2009 American Recovery and Reinvestment Act. Read more from Andrew Kreighbaum.

University Research Groups Seek $26 Billion: The shutdown of laboratories on university campuses has put the future of the U.S. research enterprise at risk, several higher education groups including the Association of Public and Land-grant Universities and Association of American Medical Colleges told congressional leaders in a letter yesterday. The groups asked lawmakers to help maintain the research workforce until operations return to normal on most campuses and support the cost of ramping up work again when labs can resume operations. They asked for $26 billion in additional funding for major research agencies including the National Institutes of Health, the National Science Foundation, NASA, and others, Andrew Kreighbaum reports.

Chamber Wants to Resolve Patchwork of Virus Orders: The U.S. Chamber of Commerce is calling for a greater focus on establishing a uniform, international approach to determine which businesses and industries should be deemed “essential” during the coronavirus pandemic. State and local governments in the U.S. have power to set their own restrictions on which businesses are spared from mandatory-closure orders, in some cases making decisions based on nonbinding guidance the Department of Homeland Security issued last month. Read more from Jaclyn Diaz.

Congress Urged to Delay Utility Shutoffs: Congressional leaders were urged to include at least $12.5 billion in stimulus funding to help people struggling to pay their water and sewer bills. Pelosi already has indicated she supports a bill to help families who can’t afford to pay water and sewer bills. Democrats and a group of environmental, social justice, and labor groups wrote separate letters to congressional leaders seeking assistance for local water and sewage utilities that are losing revenue from suspending shutoffs and forgiving debts. Amenda H. Saiyid has more.

‘Do Your Job’ Pence Tells Food Workers: Just hours after a labor union reported what may be the first poultry-worker deaths associated with the coronavirus in the U.S., Vice President Pence urged American food workers to continue to “show up and do your job” and said their work was vital. The Retail, Wholesale and Department Store Union that represents thousands of poultry-processing workers across the southern U.S. reported that two members at a Tyson Foods facility in Camilla, Ga., died from the virus. Read more from James Attwood and Isis Almeida.

Research, Treatment & Coordination

Trump Floats Hold on Funding for WHO: Trump said he is considering putting a “hold” on U.S. funding for the World Health Organization after the agency “blew it” by failing to sound the alarm sooner about the virus. “I’m not saying I’m going to do it, but we’re going to look at it,” Trump said at a White House briefing yesterday.

Congress allocated about $123 million to the WHO for fiscal 2020. Earlier in the briefing Trump called the Geneva-based international body “very China centric.” He added that the WHO was wrong to advise against the travel restrictions that were imposed on China earlier this year. “They are always on the side of China, but we fund it,” Trump said. “So we want to look into it.” Alex Wayne and Justin Sink have more.

Behavioral Health Groups Seek $40 Billion: A collection of mental health and addiction treatment groups called on the federal government to set aside $38.5 billion in the next stimulus package for behavioral health organizations enrolled in Medicaid. The groups, led by the National Council for Behavioral Health and American Society of Addiction Medicine, want funds for community behavioral health organizations in the next coronavirus stimulus bill.

The groups argue that, while billions were pumped into the health care industry in the previous coronavirus bill, nothing was allocated specifically for behavioral health organizations, which “are battling two emergencies,” said Paul H. Earley, president of ASAM. In addition to the pandemic itself, behavioral health groups are seeing an “explosion of patients in crisis as a result of isolation, anxiety and economic distress,” he said in a statement, Alex Ruoff reports.

Trump Thursday plans to speak to leaders and advocates from mental health organizations to discuss resources and tools that “we’ll make available to them—they need help,” the president said in a White House press briefing yesterday. “We must also ensure that our country can meet the mental health needs of those struggling in this crisis,” he said.

Trump Administration Puts VA Workers At Risk, Union Claims: The Trump administration is requiring veterans’ hospitals and federal prison employees who’ve been exposed to the coronavirus to go to work without a 14-day quarantine, putting them at risk, a union representing the workers said. In a pair of complaints filed yesterday to the Labor Department’s Occupational Safety and Health Administration, the American Federation of Government Employees, which represents 260,000 employees at Veterans Affairs, said the government was failing to follow its own guidelines to slow the spread of the virus. Read more from Erik Larson.

Elections, Politics & Policy

Biden Says Damage Could ‘Eclipse’ Great Depression: Joe Biden said the economic recovery from the coronavirus would likely be the “biggest challenge in modern history,” suggesting it could surpass what the country faced after the Great Depression. “I think it may not dwarf, but eclipse what F.D.R. faced,” Biden said last night in an interview with Chris Cuomo on CNN, referring to President Franklin D. Roosevelt. But Biden, the front-runner for the Democratic presidential nomination, said the recovery efforts would create an opportunity for the next president to address the nation’s longstanding structural problems. Read more from Tyler Pager.

Wisconsin Voters Forced To Wait at Polls: Wisconsin voters defied stay-at-home orders and waited for hours to cast ballots in the first state to hold an in-person election since the coronavirus pandemic shut down most public spaces. Although at least a dozen states have delayed primaries or switched to vote-by-mail since the outbreak, similar attempts by Wisconsin’s Democratic governor, Tony Evers, were stymied by Republican opposition and rulings from the conservative majorities on the state and U.S. Supreme Courts. The election led to renewed calls among congressional Democrats for national legislation to address the pandemic’s effects on voting. It’s likely that there will be court challenges to the results, which in a twist, won’t be announced until Monday.

“An election that forces voters to choose between protecting their health and casting their ballot is not a free and fair election,” House Administration Chairwoman Zoe Lofgren (D-Calif.) said in a statement, Ryan Teague Beckwith reports.

• Meanwhile, Texas Democrats are suing to try to spare voters from being forced to go to the polls during a pandemic, like in Wisconsin. Gov. Greg Abbott (R) already postponed a runoff election to July 14, from May 26, as part of the state’s efforts to mitigate the spread of the coronavirus, but the Democrats say that’s not enough and concerns will remain through the November general election. The complaint says the state has no given relevant guidelines for who can vote by mail during the current crisis, Edvard Pettersson reports.

Leaders Call for Remote Voting Options: Bipartisan leadership of the House Problem Solvers Caucus, made up of 25 Democrats and 25 Republicans, called on Speaker Nancy Pelosi (D-Calif.) and House Minority Leader Kevin McCarthy (R-Calif.), to consider remote options for lawmakers, including voting by telephone, video conference, or voting machines in district offices. Most members have returned to their districts due to the coronavirus pandemic. They said they want House leadership to use technological options to allow them to vote remotely.

“Governments around the world, including England and Japan, have deployed these options, and are voting from home,” the caucus wrote. House leadership has not backed a rules change to enable remote voting to date, the letter says, Rebecca Kern reports.

What Else to Know

Trump Forced by Oil War Into Push for Higher Prices: Trump is trying to do something no U.S. president has dared to do in decades: Drive up the price of oil. For more than three decades, U.S. presidents proclaimed cheap fuel as an almost God-given right for American motorists and homeowners, shaping the country’s foreign policy in pursuit of lower prices. As president, Trump didn’t just back cheap crude, he was its biggest supporter, frequently attacking OPEC and celebrating the shale boom’s deliverance of “energy dominance.”

Now, the Russia-Saudi price war and a killer pandemic have caused prices to plunge, putting Trump in the awkward position of begging those same countries to turn off the taps, even though retail gasoline will become more expensive as well. The U-turn comes as America has gone from being the top importer of oil to the top producer, aligning its interests more closely with Saudi Arabia and Russia in a shift that holds the potential to reverberate through foreign policy for years to come. Read more from Jennifer A. Dlouhy and Javier Blas.

Deficit at $741 Billion in First Half of 2020: The federal deficit was $741 billion in the first half of fiscal 2020, $50 billion more than in the first half of fiscal 2019, according to initial estimates by the Congressional Budget Office. The effects of the coronavirus did not affect the figure significantly, but some revenue effects will likely become apparent later this month because the tax filing deadline was delayed from April until July, the report said. But the virus response did lead to a $3 billion boost in March spending by the Labor Department, in part because of increases in unemployment benefits, the report said, Jack Fitzpatrick reports.

Lawmakers Seek Explanation on Trump’s IG Firing: Senate Finance Chairman Chuck Grassley (R-Iowa) is drafting a bipartisan letter demanding that Trump explain his firing of the intelligence community inspector general whose handling of the whistleblower complaint about Ukraine led to the impeachment inquiry. Their letter will reiterate the importance of inspectors general and state that the law requires the president to give more information to Congress on his decision to remove Michael Atkinson, according to a person familiar. Read more from Steven T. Dennis.

• Grassley in a statement also praised the work of acting Department of Defense Inspector General Glenn Fine, who was ousted by Trump yesterday days after being chosen to lead a team of auditors to oversee $2 trillion in federal coronavirus relief spending. At a White House briefing yesterday, Trump said, “I don’t know Fine. I don’t think I ever met Fine.” Democrats were also quick to praise Fine and criticize the move, with Senate Minority Leader Chuck Schumer (D-N.Y.) stating “President Trump is abusing the coronavirus pandemic to eliminate honest and independent public servants because they are willing to speak truth to power and because he is so clearly afraid of strong oversight.” Read more from Todd Shields.

Texas Allowed to Halt Abortions: Texas struck a blow against abortion access yesterday, after a federal appeals court said the state can halt most procedures as long as the governor’s emergency health decree to save medical supplies for fighting the pandemic is in effect. A three-judge panel in New Orleans said on a 2-1 ruling yesterday that some women’s constitutional rights to abortion can be temporarily set aside during a national health emergency.

U.S. Supreme Court precedent says “all constitutional rights may be reasonably restricted to combat a public health emergency,” said Circuit Judge Kyle Duncan, who was appointed by Trump, in the majority opinion. The decision comes after clinics, impatient for guidance, threatened to escalate the issue to the Supreme Court last week. Read more from Laurel Calkins.

EU Upgrades Trade Arsenal to Offset U.S. Attack on WTO: European Union governments agreed to expand the bloc’s trade-sanctions power, signaling that concerns about the U.S. challenge to the global commercial order run deeper than the coronavirus pandemic. Diplomats from the 27-nation EU approved an upgrade to European legislation on enforcing international commercial rules. The envoys decided to let the EU impose penalties against countries that illegally restrict commerce and simultaneously block the World Trade Organization’s dispute-settlement process. Read more from Jonathan Stearns.

With assistance from Andrew Kreighbaum and Alex Ruoff

To contact the reporters on this story: Zachary Sherwood in Washington at zsherwood@bgov.com; Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Loren Duggan at lduggan@bgov.com; Michaela Ross at mross@bgov.com